This paper studies how competition affects the role of reputation in encouraging sellers to exert effort. More competition disciplines sellers, but at the same time, it erodes reputational premia. This paper identifies whether one effect dominates the other using data from Airbnb. I exploit the introduction of a short-term rental regulation effective in San Francisco in 2017 that halved the number of short-term listings on the platform. I focus on hosts who are present on the platform before and after the regulation, and I identify a negative causal effect of the number of competitors on ratings about hosts’ effort. I extend this result with two other measures of effort: hosts’ response rate and response time. I confirm that hosts exert less effort when the number of competitors increases. The rate of responses within 24 hours decreases, and response time increases. This paper was accepted by Matthew Shum, marketing. Funding: This work was supported by the Ministerio de Economía, Industria y Competitividad (Spain) [Grant ECO2016-78632-P]. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mnsc.2023.4758 .

Abstract Using field experiments, I investigate if provision of (social) information can increase incoming university students' attendance in a voluntary remedial math course. In Intervention 1, treated students receive an invitation letter with or without information about a past sign-up rate for the course. In Intervention 2, among those who signed up for the course, treated students receive reminder letters including or excluding information on how helpful the course had been evaluated by previous students. On average, no treatment increases participation in the course, but further analyses reveal that the effects in Intervention 1 are heterogeneous along two dimensions: First, suggesting salience as a mechanism, both types of information raise attendance among students who enroll late in their study program, which in turn increases their first-year performance and closes the achievement gap to early enrollees. Second, the effect of the letter with information about the past sign-up rate depends on the predicted ex-ante sign-up probability. Students whose probability falls just short of the past sign-up rate increase sign-up and participation, while the opposite is true for students whose sign-up probability exceeds the social information. Along this dimension, however, the changes in attendance do not carry over to academic achievements.

Abstract We show that the exposure to war-related violence increases the quantity of children temporarily, with permanent negative consequences for the quality of the current and previous cohorts. Our empirical evidence is based on Nepal, which experienced a 10 year long civil conflict of varying intensity. We exploit that villages affected by the conflict had the same trend in fertility as non-affected villages prior to the onset of conflict and employ a difference-in-differences estimator. We find that women in affected villages increased their fertility during the conflict by 19%, while child height-for-age declined by 10%. Supporting evidence suggests that the temporary fertility increase was the main pathway leading to reduced child height, as opposed to direct impacts of the conflict.

We analyze how higher demand-forecasting precision affects firms' chances of sustaining supracompetitive profits, depending on whether actions are observable or hidden. We identify a dual role of improving forecasting ability for situations in which actions are hidden. Improved forecasting ability increases the temptation for firms to deviate, reducing profits; at the same time, such ability reduces and eventually eliminates the uncertainty over whether deviations are occurring. Our framework, in which firms decide on prices and promotional activities, reveals a U-shaped relationship between profits and predictive ability. Generally, collusive profits may increase or decrease in signal precision, depending on action observability, highlighting the importance of industry-specific considerations for regulatory interventions and competition policy.

AbstractThe purpose of this study is to explore the relationship between individuals’ satisfaction with amenities and environmental quality and taste for revolt in the Middle East. Using recent World Value Survey data (WVS7, 2017–2021) from Egypt and Iraq (which have been experiencing severe environmental degradation and inadequate and mismanagement of public infrastructure) and applying Probit regressions, our results show that satisfaction with amenities and environmental quality indicators are negatively and statistically related to individuals' inclination towards revolt in both countries. This finding is more pronounced in urban areas, particularly in large cities. We also find that individuals’ satisfaction with amenities and environmental quality affect the taste of revolt through the individual’s life satisfaction and satisfaction with the government’s provision of utilities. The analysis for Egypt suggests that satisfaction with public transportation systems, roads and highways, air quality, and housing quality are significantly and negatively associated with support for revolutionary action. For the Iraq sample, we find that dissatisfaction with roads and highways, water quality, school quality, and the physical settings of cities lead to a higher probability of support for uprising.

Scientific evidence regularly guides policy decisions1, with behavioural science increasingly part of this process2. In April 2020, an influential paper3 proposed 19 policy recommendations (‘claims’) detailing how evidence from behavioural science could contribute to efforts to reduce impacts and end the COVID-19 pandemic. Here we assess 747 pandemic-related research articles that empirically investigated those claims. We report the scale of evidence and whether evidence supports them to indicate applicability for policymaking. Two independent teams, involving 72 reviewers, found evidence for 18 of 19 claims, with both teams finding evidence supporting 16 (89%) of those 18 claims. The strongest evidence supported claims that anticipated culture, polarization and misinformation would be associated with policy effectiveness. Claims suggesting trusted leaders and positive social norms increased adherence to behavioural interventions also had strong empirical support, as did appealing to social consensus or bipartisan agreement. Targeted language in messaging yielded mixed effects and there were no effects for highlighting individual benefits or protecting others. No available evidence existed to assess any distinct differences in effects between using the terms ‘physical distancing’ and ‘social distancing’. Analysis of 463 papers containing data showed generally large samples; 418 involved human participants with a mean of 16,848 (median of 1,699). That statistical power underscored improved suitability of behavioural science research for informing policy decisions. Furthermore, by implementing a standardized approach to evidence selection and synthesis, we amplify broader implications for advancing scientific evidence in policy formulation and prioritization.

ABSTRACT We argue that our understanding of industrial policy in the presence of ‘strategic’ industries that exert positive externalities on the national economy may benefit from an extension of quantitative general equilibrium trade models making the extent and pattern of trade-induced reallocations more salient. To make these features relevant for national welfare, we introduce the notion of the ‘social footprint’ of globalisation as the result of suboptimal trade-induced structural transformation in the presence of externalities. For proof of concept, we use simple workhorse models featuring two countries and two industries (only one of which is ‘strategic’) to highlight the role of the ‘scale elasticity’ of the strategic industry and the consequences of the most common assumptions on market structure in quantitative trade analyses.

BackgroundChina was the first country affected by the COVID-19 virus, and it is a very important case to study the effects of the virus and the consequent restrictions. However, national representative studies of how the COVID-19 pandemic affects mental health in China are still limited.MethodsUsing two waves of the China Family Panel Studies, we follow the same individuals before and during the pandemic. We compare weighted means using 95% CIs to explore mental health deterioration, and we and perform several linear regressions with the Ordinaly Least Square (OLS) estimator to identify individuals most affected by the COVID-19 pandemic.ResultsThe prevalence of severe cases of depression, measured using an eight-item version of the common Centre for Epidemiologic Studies Depression Scale (CES-D), increased from 6.68% in 2018 to 7.86% in 2020; quantifiable as around a 18% increase. This deterioration is higher for individuals subject to strict lockdowns, about 0.4 symptoms more on average, and it is stronger among those who already reported symptoms of depression in the 2018 wave of data. Individuals with more open personalities tend to experience more severe deterioration: a 1 SD change in the openness trait corresponds to 0.05 more symptoms. On the other hand, more neurotic individuals seem less negatively affected.ConclusionWe find clear evidence of a moderate level of mental health deterioration between 2018 and 2020. These effects are larger for individuals subject to stricter lockdowns and for individuals with more open personalities.

AbstractUsing the Austrian Business Survey between 2011 and 2016, we study how firms' individual credit market experiences influence their beliefs about the bank lending policy. Firms that have recently experienced a loan rejection are more likely to believe that the lending policy is restrictive. We see similar effects for firms that were granted loans, but with conditions worse than anticipated. Exploiting the panel structure shows that firms without recent credit market experience are less likely to change their beliefs, which converge towards the middle category. Our findings are in line with theories of rational inattention and with asymmetric experience effects.

AbstractEmploying a two-period model with an environmental externality, this paper investigates the relation between emission taxation and the optimal level of public debt. The central insight is that the effect of emission taxation on optimal borrowing is ambiguous and may lead to lower or higher optimal debt. In the context of climate change, we even show that the counterintuitive result of a higher optimal debt level is likely in the short-run and possibly also in the long-run, a result that provides a novel rationale for public borrowing. Our basic arguments turn out to be robust against several generalization.